Only 55 percent of retailers worldwide have technology in place to manage unplanned absences: Global Study

The Indian retail industry is one of the most dynamic and fast-paced industries, poised to grow at a rate of 60 per cent to US$1.1 trillion by 2020.

Indian Retailer Bureau
Sub Editor

According to a survey of 800 retail managers across multiple countries conducted by The Workforce Institute at Kronos Incorporated, for every 10 hours of in-store labour budgeted, more than one hour is wasted due to staffing misalignment caused by unplanned employee absence. Absenteeism drives understaffing worldwide and poses significant workforce management challenges for retail organizations, with many citing a significant impact on productivity, labour costs, store revenue, and customer satisfaction.

The Global Retail Absence survey, conducted with Coleman Parkes Research, analyzes the responses of retail managers across Australia, Canada, France, Germany, the U.K., and the U.S. to examine the broad impact of absenteeism on retail organizations with more than 1,000 employees. The survey brings to the forefront, corrosive effects that unplanned absences have on store operations, which, according to more than half of retail managers worldwide (52 percent), is one of their organization’s most difficult, complex, and time-consuming issues.

Retailers are understaffed 25 percent of the time due to last-minute absenteeism

Faced with a 7 percent average rate of unplanned absence (i.e. shifts are scheduled but unexpectedly not worked), retailers in the U.K. (74 percent), Canada (72 percent), France (71 percent), Germany (69 percent), Australia (64 percent), and the U.S. (61 percent) are understaffed more than 25 percent of the time

Retailers in the U.K. (44 percent) and the U.S. (41 percent) are hit hardest by absenteeism on the weekends, while in Germany (33 percent) the highest rate of absence typically occurs on Mondays

For the most part, retailers are given just one to three hours’ notice when an employee is not going to show up for work. These numbers are highest in the U.K. (53 percent), the U.S. (49 percent), and Canada (40 percent). The impact of filling these shifts on short notice means that one in four retailers (26 percent) are working with staff that have the wrong skills at least half the time

Filling vacant shifts on the fly is stressful for managers and disruptive to a retailer’s bottom line.

An average 6 percent of labour hours each month are worked to cover issues such as unplanned absence but have not been formally scheduled. This causes unnecessary stress for more than half of U.S. retailers (57 percent) as well as store managers in Germany (44 percent), Australia (41 percent), France (39 percent), Canada (38 percent), and the U.K. (33 percent)

Despite best efforts, retailers struggle to schedule for low- and peak-demand

The perpetual issue and corrosive effects of absenteeism have led the vast majority of retail organizations (88 percent) to proactively over-schedule additional labour each day to cover for anticipated absences. This is most common in France (95 percent), the U.S. (89 percent), and Germany (88 percent)

Retailers regularly find themselves with either too few or too many associates during periods of low- and peak-demand, and some admit to being understaffed (31 percent) or overstaffed (22 percent) at least half the time

More than half of retailers worldwide (56 percent) say it is a challenge to build work schedules that meet customer, business, and employee demands. This is the most common workforce management challenge for retail mangers across the U.S. (69 percent), Canada (64 percent), France (60 percent), Australia (58 percent), and Germany (55 percent)

Despite the fact that most retailers worldwide say work schedules are posted between one and two weeks in advance, retail managers admit that 86 percent of schedules are amended to some degree after they are published

Retail managers are hungry for technology to solve staffing issues.

Only 55 percent of retailers worldwide have technology in place to manage unplanned absences, with both the U.K. (41 percent) and Canada (38 percent) reporting below-average use. In comparison, 76 percent of global respondents have an automated solution to manage time and attendance, and 73 percent use technology to manage planned absences, such as time-off requests.

Three out of five (59 percent) retailers say scheduling technology has a positive impact on productivity within their teams, with store managers in Canada the most bullish about technology at 76 percent.

Retail managers are confident that effective absence management technology can help reduce absenteeism: globally, retailers anticipate an 18 percent decrease in unapproved absence rates after implementing a new absence and shift-swapping solution, with France expecting the best return on investment, anticipating a 23 percent decrease.

Quantifying the benefits of absence management, retailers additionally expect a new absence and shift-swapping solution to reduce labour costs by nearly 3 percent. In the U.S., one in 10 retail managers estimate the cost reduction could be as high as 5 percent.

The Indian retail industry is one of the most dynamic and fast-paced industries, poised to grow at a rate of 60 per cent to US$1.1 trillion by 2020. From being largely unorganized or individual owned to moving to a more customer focused sector, retail industry now contributes close to 10 per cent of India’s GDP. However, the sector faces instances of last minute absenteeism which results in retailers being understaffed 25 per cent of the time and filling vacant shifts is stressful for managers, which disrupts the bottom line.

Commenting on the Global Retailers Survey, James Thomas, Country Manager, India, Kronos Incorporated said, “We are seeing similar trends in absenteeism in the Indian Retail market as well. Only 55 per cent of retailers worldwide have the technology in place to manage unplanned absences, while in India this figure would be lower. Recently, we have observed a sudden uptrend in the Online retail segment, where seasonal variability of workforce is very high, and sudden events like sales and promotions builds a surge in manpower requirements, and if not planned for can disrupt their business. Large retail houses in India are increasingly seeing the business value in Workforce Management solutions like Kronos, and we are excited about their interests.”